RAK Properties, the developer backed by the Ras Al Khaimah Government, has posted a 25 per cent profit increase for the first quarter despite a slowing property market in the Northern Emirates.
The Abu Dhabi-listed group said on Sunday profit for the first three months of the year increased to Dh18.5 million, up from Dh14.8m from a year earlier.
The profit rise came after a 54 per cent increase in sales as revenues grew to Dh71.5m, up from Dh46.7m a year earlier, thanks to the handover of completed villas at the Flamingo Villas project in its Mina Al Arab master-planned development.
In a statement accompanying the accounts, Mohammed Sultan Al Qadi, RAK Properties’ managing director and chief executive, said that 157 Bermuda villas and a second phase of 57 Flamingo villas at Mina Al Arab were under construction.
He said the company had started to operate its Lagoon marina, a lifestyle marina at Mina Al Arab aimed at driving footfall to the shops and cafes in the company’s Lagoon Walk development.
Mr Al Qadi said the company had secured bank finance for two development projects expected to begin this year: the Julphar Residence, a 24-floor tower planned for Reem Island in the capital, which was originally announced in 2008; and a 250-room eco-hotel in Mina Al Arab, which will be managed by Minor Hotel Group.
RAK Properties said that it was also looking to press ahead with the development of 205 flats in Mohammed Bin Zayed City in Abu Dhabi, which would range from studios to two-bedroom flats. It is also planning to build a five-star hotel at Mina Al Arab.
The company said it had settled a Dh92m loan that matured in January.
RAK Properties launched Mina Al Arab, a housing complex spread over 43 million square feet, in May 2006 but was forced to put more than Dh1 billion worth of projects on hold as the global financial crisis hit the industry in 2009.
The real estate markets in all of the UAE’s Northern Emirates slowed at the end of last year as Dubai’s property slump and the effect of low oil prices hit sales, according to brokers.
“The overall negative sentiment in the Dubai market has affected sales in the Northern Emirates, which remained slow,” said John Stevens, the managing director of the real estate services company Asteco.
“This was especially evident in Ras Al Khaimah, which historically benefited from good levels of demand for its master-planned developments, as they were considered a better value for money option compared with Dubai.”
RAK Properties shares remained unchanged at 56 fils on Sunday.
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